Financial Data and Key Metrics Changes - Adjusted EBITDA for Q2 2025 was $33.7 million, an increase of $6.1 million or 22.1% compared to 2024 [7][27] - Adjusted EBITDA margin improved to 10.2%, up 220 basis points year-over-year [7][28] - Adjusted earnings per share reached $0.88, a 44.3% increase from $0.61 in Q2 2024 [7][29] - Backlog decreased sequentially by 5.4% to $380.8 million [7][8] Business Line Data and Key Metrics Changes - In the Infrastructure Solutions segment, equipment sales were lower due to weak demand for forestry and mobile paving equipment, while aftermarket parts sales increased by 9.4% [27][30] - Material Solutions segment saw equipment sales increase by 4.9%, but aftermarket parts sales declined by 5.9% [30] - Adjusted EBITDA for the Material Solutions segment increased by 39.2% to $14.2 million, with adjusted EBITDA margin rising to 11.3% [30][31] Market Data and Key Metrics Changes - Approximately 80% of revenues are generated in the United States, with a favorable market outlook due to federal highway funding [17][21] - Total value of state and local government transportation contract awards increased by 9% to $47.8 billion through April 2025 [18] - The current surface transportation law is set to expire on October 1, 2026, with optimism for a new bill [19][20] Company Strategy and Development Direction - The completion of the TerraSource acquisition is expected to drive future growth, with aftermarket part sales representing approximately 63% of total revenue [11][12] - Focus on operational excellence and efficiency improvements to enhance margins and profitability [34] - Emphasis on growing the recurring aftermarket parts business and exploring inorganic growth opportunities [34] Management's Comments on Operating Environment and Future Outlook - Management noted a mix of external tailwinds and headwinds, including high interest rates and a changing tariff environment [14][16] - Customer sentiment remains cautiously optimistic, with large backlogs of work reported [14][34] - The company expects continued progress in the Material Solutions segment in the second half of the year [9][24] Other Important Information - The company maintains a strong balance sheet with cash and cash equivalents of $87.8 million and total available liquidity of $247.6 million [32] - Free cash flow for the quarter was $9 million, representing 53.9% of net income [32] Q&A Session Summary Question: Year-over-year margin improvement details - Management highlighted that margin expansion was driven by procurement efforts and operational excellence initiatives [40] Question: EPS drag from tariffs - Management indicated that they successfully mitigated tariff effects during the quarter and did not provide a specific number [42] Question: Market differences between asphalt/concrete plants and mobile paving equipment - Management explained that mobile paving equipment is facing inventory challenges similar to previous issues in the Material Solutions business, while asphalt plant demand remains strong [43] Question: Concerns about infrastructure spending bill winding down - Management reassured that customer optimism remains, with strong backlog and order visibility for Q3 [44][46] Question: Impressive cash flow management - Management noted effective working capital management and opportunities for further improvement in inventory levels [49][51]